Transforming Company Culture: From Employee-Centric to Standards-Centric

[00:00:00] Taylor Holiday: Welcome back to another episode of The Ecommerce Playbook Podcast. Today is an episode I'm very excited about. And I have been dragged here by the demand of the people which is to say a few episodes ago, I shared about how at our client summit, I was surprised only due to my narrow world, personal worldview to discover that the vast majority of my clients had this immense interest in having conversations related to culture and people.

And. In the midst of what they're going through. And I see it so much first and foremost for the business and the finance lens. What I can often neglect is a lot of the decisions that we're talking about and that underpinning the idea of redesigning your system for profit. Is a reality that that probably begins with redesigning the way your people experience your company and culture for the sake of profit and efficiency.

And this is something that we at CTC have lived very intimately. I think we have shared with you all that in the end of 2022. We went through a significant redesign of our own system for profit. We had to live this world that we're trying to guide our customers through now, where we had to go through a substantial amount of layoffs.

We had to reimagine our mission, our vision, and the entirety of the underlying culture that made this place work. For a thousand reasons, not because the last one was wrong or incorrect, but because the new future we wanted to create demanded something different. And when that's the case at the very root level in our business is people.

And likely in many of your businesses, it's the same, that there's a group of humans, you know, uniting around a common purpose to dry and produce some outcome. And if you are in a position right now where maybe you're having to re-imagine Your culture than this conversation is probably going to be for you because today I am joined by Dane Sanders, our VP of Employee Performance and Development.

Or did I say that backwards employee development and performance? I never know what the right order, but I know 

[00:01:51] Dane Sanders: Yeah. Usually it's development happens before they

[00:01:54] Taylor Holiday: That's right. Development then perform. I apologize. But I'm super excited because Dane. Has been a critical part of that for CTC and plays that role here for us today, and I'm excited for him to share a little bit about how he thought about creating that system here in a way that you could probably pick up some of the pieces and apply inside of your business or.

Perhaps you're an employee and you don't get control over the culture, but you're imagining what it might be like to participate in a high performing culture in which case maybe CTC is for you. So, Dane, pleasure to have you here today. Anything, any additional context you, you'd add to the journey we're about to go on?

[00:02:31] Dane Sanders: yeah. Yeah. First of all, thanks for having me, Taylor. Appreciate it. And it's, it's fascinating to me to comment on this just because of the seat I've been privileged to have over the last several years with CTC As you know, but listeners probably don't is I was a, a contractor to CTC for a number of years where my job was to come in and help lead initiatives to help employees achieve dreams and to work through various coaching efforts and apply different ways for individuals to get after the things they wanted. And if. At one point basically end of 2022, that window that you're just describing, you invited me to relate with CTC in an entirely different kind of way. And I have a hunch that's probably the right place to start the conversation because it started with you Coming to me after a weekend with some cross section of our employees, we pulled aside and started a pretty deep conversation around commitment and what it takes to win in the industry that we're in, and the market that we're in, and the economic conditions that we are in and really inviting a handful of employees from I see all the way up the chain to, you know, Commit at a really disproportionate level than what we're used to. And in response to that, you had this great line. Well, 2 lines. 1, you fired me as a consultant. And then 2nd, you invited me into the onto the team to play this role of, of could we actually raise the standard of performance? In a legacy company that had been around for a while and we'd established a culture, could we actually do something new with that group? And you had come from feedback that that wasn't possible. You had kind of, there was kind of an internal belief system that no, we, we can't ask too much of our people, they'll crumble or they'll quit. And that was going to somehow be bad news for CTC. Cause we're so dependent as a human services business on the people. So that's. That in my mind, that was this moment for me when you said, Hey, could we try and apply? Could we actually ask more of our people and set them up to win in that context that I find the most intriguing point? Because I know for myself, I had a lot of theoretical understanding of these things and a sense of, you know, What I think could make sense and, and work, but I'm not clear that we hadn't played it out in real life yet, at least not at scale with the entire team. And that's, that's where I, I came in.

[00:05:11] Taylor Holiday: Yeah, so Dane's describing CTC during the course of the COVID era after going remote dealt with a lot of employee attrition, and we tried many, many different things in the name of attempting to solve that problem. And just like I have described where CTC has come into as a service provider and agencies and there's sort of a capitulation to the idea that first order profitability is no longer a thing that's achievable.

We had sort of adopted for ourselves the idea that solving the employee attrition was a macro issue that we were subject to and couldn't couldn't resolve and While there's certainly some of that at play all the time, we just needed a re-imagination of what could be possible. And sometimes what I've recognized is that you just need at that moment to introduce like even if at, at its worst, you might call it delusional optimism about something that could be possible.

But in reality, unless you declare it, so it certainly isn't possible. And so somebody has to begin with the premise that the problem itself is solvable. And what I saw from Dane and what he describing was he just simply accepted. The possibility that we could change it. And that was the first step.

And that's the first thing I drastically needed. And I can imagine for many of you listening, whatever the problem is inside of your business, you're How energizing it might be to just suddenly have a partner that would say to you, this is something we could solve. This could be better. And that begins the point of possibility.

And then you have to go out to really do the strategy. And luckily, Dane had a corresponding strategy for how we might shift. Our orientation about constantly trying to give the employees something to make them want to stay, which was kind of the state we found ourselves in, which was consistently trying to come up with another way to improve the experience or come up with a better benefit or make the job feel better to do.

And we were in this constant give, give, give, give, give to what if we just stopped. And we invited people into a completely different frame. And so that's, I think the opportunity that we saw and maybe Dan, you can pick it up from there because of the slide you're describing. And if you're watching on YouTube, I would encourage you to follow along with the visuals.

If not, this deck will be in the show notes. You can pick it up. But one of the big changes was this idea of moving away from employee centricity to both customer and mission and company centricity in a way that invited people into. Making an impact and holding a high standard for performance for themselves.

But maybe you can tell me a little bit about what you saw and how we got there.

[00:07:49] Dane Sanders: Sure. I had a huge advantage coming from the outside, not being on staff where I, I could look at what appeared to me to be A problem that, candidly, I was contributing to as a, as a contracted individual. But what, what seemed obvious to me was with great intention, well intentioned efforts, we had created an employee centric work environment.

And, and we felt like we needed to, you know, this was the moment where employees were. Ruling the roost and on some level that's still happening in our culture today, where it seems like if we aren't disproportionately attending to the holistic needs of the employee to ask them to go above and beyond just doesn't seem reasonable. And yet what that did was it took our focus away from the reason we existed as a business at all, which was our customers. And when we didn't tie. Our culture to the, the results that our customers were experiencing. We had misalignment. We had, you know, really good employees who we had great esteem and affection for who were driven to work so that work could serve them as opposed to driven to work so that we could serve our customers and that combination of an employee centricity with a lack of accountability to our customers who are paying the bills. And then this third piece, and you alluded to this Taylor. Kind of an exclusive emphasis on. Extrinsic drivers for motivation, and I want to be clear what I mean by that for a 2nd where we just we focused a lot on. Could we provide 1 more benefit? Could we pay them just a little bit more? We were losing people for really, you know, a 5, 000 dollar, 10, 000 dollar difference to go work for somebody else and and a, and a title change. It just felt like odd to all of us. And yet it didn't feel like we had any other levers to pull in order to motivate an individual to want to stick around. So I think the combination of employee centricity, this lack of, you know, real fixation on our customers. Well, being and their success from a profit perspective and limited options on how we could motivate our employees left us in this state of. Of we were creating an entitled culture and again, not, not intentionally almost just, it was drifting in that direction and it didn't seem like we could do much in response. And then in response from my take coming in for some other exposures in different areas and, and training and work, it occurred to me that we could approach this in a novel way by switching from employee centricity to standards centric centricity. The challenge with this 

[00:10:42] Taylor Holiday: I just stop right here? Because I want to, I 

want to make something really clear. This could sound like we're saying we had a bunch of entitled people and that was the problem, but I want to make 

something really clear. I was the problem. I created an expectation. That the reason you should be here is because of what you will get.

Whether that's the TMID program, immense benefits, work life balance. I said, if you show up, you will receive these things. And that is why you should be here. The problem with that is that I was also making a promise to a bunch of customers about what they would get. And sometimes those things became at odds with one another.

About what each of them wanted to receive from me. And I was making both promises simultaneously in a way that created conflict. And so instead what I realized was at the end of the day, the promise that I make to the person paying me, the money makes the whole business function. And the promise has to be to fulfill that standard.

And then I have to invite people into a set of behaviors at their own choice and discretion that they are excited to participate in that will deliver that promise. And everyone that, like, you know, and this is something I've never really addressed too much publicly, but like everyone that was in the middle of that transition from one of those promises to the other is right to blame me or to call me deceptive or to say that I changed or to say that the culture didn't deliver on its promise because.

I recognize that we had to switch it, and it was my fault in the expectation that I was creating for both parties. There was creating a conflict for CTC that I had to reconcile, and I chose a specific path to reconcile that, but I want to make it very clear. I think every 1 of those people that existed in CTC has the potential to be an amazing employee somewhere, and it wasn't a 

them problem. It was an environment problem based on what I had created that actually led to a lack of thriving for everyone.

[00:12:36] Dane Sanders: Yeah. And that question of thriving is fascinating to me. How, how do you actually humans thrive? It turns out even with this well intentioned effort that we had around employee centricity. And by the way, we weren't alone. There's a whole, the whole Seemingly Western world is fixated on how do we make sure that employees, you know, go to Harvard business review.

You can see a lot of articles on having creating an environment where employees are really comfortable and, and pleased, but it turns out people actually don't tend to flourish in that environment. And we know this from a lot of great studies. So, and not just theoretical, but But played out, so, so given that, that was the idea of, like, what could we do where we would take responsibility for a shift in our culture where we move from employee centricity standards? And I want to pause here too, because this can be an overwhelming moment, the idea of, like, all of a sudden, we're going to deploy standard centric efforts. That would include a number of Of efforts at one time. And if you have a company that's been around for a while, it can just feel overwhelming.

Like, how in the world are we going to establish guidelines, procedures, document those standards, have peer reviews, regular updates, establish best practices, being constant improvement, offer training programs in an environment where everything is changing by the day create innovation and incentives and feedback mechanisms and performance metrics and accountability to create this. This enhanced organizational performance, it's just too much at once. So we just took all of these ideas of as a long term ambition and really boiled it down to a very simple principle. And that's this, if there's no compression, there's no growth. There's no people actually can't. If you're not growing, they're not flourishing as human beings.

And we recognize that if we don't invite compression and embracing of, of tension not at a level of toxic stress, but at a level of, of constant, just tension, compression, then people can't grow. And we took this, this notion of, of inviting individuals to choose, to do the hard things in the context of work through the lens of our mission and our values. And you actually just heard it in our ethos just a moment ago from Taylor which was we get to take a hundred percent responsibility for the results we're getting. And that's what Taylor led with. And that's what we were all invited to as an organization. And this idea of a hundred percent responsibility you know, you hear this in law, but it like, it was various popular level books that promote these ideas of disproportionate responsibility. And yet this is, okay. the expectation of high performers. Say, yeah, this one's on me. So when Taylor's leading with what he's describing as the choices we made for the culture we were experiencing, and then the idea that we need to shift and that he would take responsibility for it, that became infectious all the way through the organization and, and was really declared as an expectation that if you're going to be a part of this thing, we all get to raise our hand and say, this is on us if we want to see progress.

And then our job was to ask the question, progress into what? So. For us our mission of shifting from helping entrepreneurs achieve their dreams to building the next generation of legendary brands and the people who will lead them. This became focused on the customer and the people that serve that customer. But to be in people's services meant that the people, our people were invited to serve this higher order thing, which is our, our customers. And we did that through very accessible, simple language values that were not meant to put on a piece of paper and hung on a wall as much as they were meant to be talked about constantly with every decision we make, every engagement we have. Will we set the standard or be standard setters? Will we be committed to be driven to increase customer value? So not our determination of the value for the customer, but the customer determining it through the lens of profit, which aligns with our methodology. And could we create an environment where excellent people want to do excellent work and what we discovered pretty quickly when we started installing these ideas and defining these terms and walking through it over and over again, We had some pretty remarkable high achievers in the organization that I don't even think we realized we were at risk of losing because they only wanted to work in an environment where they got to be a standard setter, where they were fixated on a clear objective. End zone of customer value. And they wanted to be in an environment where they got better through job every day. And so number one, we were very fortunate, I think, to make that shift. But two, we had some other people that were part of the old culture that understandably were felt like there was a bait and switch.

Like we said, we were going to do one thing and then we shifted that. And, and in that transition for good reason, good people left, but great people stayed. And that was all of the difference as we began this process moving forward.

[00:17:42] Taylor Holiday: Okay. So I think that oftentimes when you think about a reboot to culture people will neglect how much. The root programming matters and they will just jump straight to the things to do. And I think that any good organization is governed by its ideology, and then it maps the behavior to the ideology.

If you go straight to the behavior, you really struggle. You need your underlying principled ideology that you connect people to. It's because it's going to be something that you introduce them to, first read, they're going to have to learn to live into it to experience it, but you need to be able to reference back to it all the time and remind people of it.

And so I would just encourage that. The 1st step was mission. Vision values. Dan like to subsidize the word standards and values. I think that sometimes standards is is a more practical way of communicating that there's an expectation around the thing that a value can be a thing. That's like, oh, yeah, we.

Aspire to maybe have but a standard is no, this is who we are. This is what we do So I I think in some ways I like that word better But the point is, if you don't write them down and you don't explain them, and you don't start with literally forcing yourself to ask, am I ready to become these things?

Then if you just jump to the behaviors, it'll be confusing. And so it often really does. And I think businesses sometimes are hesitant to change their mission statement, hesitant to change their vision statement or their values. And I'll tell you, nobody had a deeper. Commitment to their mission statement and values than we did when we made this change.

Like, my core identity could not have been wrapped further around my mission statement and the CTC values. There were patches and apparel and visual insignia. And icons in slack and all of the things that you could imagine that were deeply connected to the previous mission statement of helping entrepreneurs achieve their dreams at CTC.

And yet we were willing to let it go because I understood that in the same way that those ideological principles program the last era. The new ones would this one. So before you get to any of the behaviors, and I see a lot of entrepreneurs, when they engage in this conversation, they say, they want to know, what can I go do?

I would just stop and say, before you go do start with the ideology and get clear on what it is that you're even trying to enact.

[00:20:04] Dane Sanders: Yeah. The, the, the ideology, some of it, at least for us, we had some advantages that are probably worth mentioning. And that was a view around. what psychologists call self determination theory. And we're going to talk a little bit about this, not in a heady way, but in a hyper practical way. But ultimately it, if you want to just think about it this way, it's a comprehensive and informed view on how humans are motivated and how they thrive in the workplace.

So if these are the ideas upon which we built out the behaviors, the tasks to go do, this was at least a Kind of collective starting point that we were leaning into the data a validated study after validated study, that this is how humans thrive, not only at work, but in life. And it really connects to motivation. So one way to think about what motivates anybody, and maybe even as listeners are considering this for themselves, you can ask yourself this question. If this resonates with you in your own sense of motivation, that there's really, Two grand levers to pull or big macro level motivations that we have.

And it's easiest just to think of those as I have short term motivation and I have long term motivation. And what we want to do is pick the levers that will be most effective for the time horizon we're talking about. So when you're thinking about short term motivation, getting someone to take action right now, it's easy.

You want to do external. Levers to make that happen. So you want someone to do something really quickly, pay them more money, give them a new title get them to feel more special about their job in some way that gives them status in the workplace or in society or culture, give them something to talk about when they go home with their, with their partners or their family over the holidays, whatever those things are, they can be helpful on some level. You can, you can edify people in, in with all hands meetings where you call people out and say, Hey, these people did great work. All those things are effective immediately. And then they're not, because the moment you've given them the raise is the peak. Of the motivation. That's when they're the most excited for what's just happened for them to want to participate more. And at that point, you have to either present another extrinsic driver and then another and another to keep them motivated, or you need to tap into something that's a little bit more of a long term motivator, which in the sciences, we talk about intrinsic drivers. So extrinsic drivers are things like money and status and intrinsic drivers Are what we actually decided to build our long term culture values around because it turns out that these things are the ones that persist in their motivation and efficacy. Now, I need to say one more piece on this that, and that is that a lot of organizations can, when we talk about culture, get kind of. Woo woo about it, where it's, it seems like there's nothing we can measure. There's nothing we can do about this, that we can tell if it's working in any kind of real way. And this became a real central problem for us is could we build out tools and means by which we could measure things like self determination or initiatives and culture that weren't just related to soft skills, and that was some of the things that we invented candidly created from scratch, and then we That could be helpful inspiration for folks in their organizations.

One of those was this idea of what we call the collective index. And with the collective index, we're really measuring for three fundamental things, ABCs of, of long term motivation and satisfaction at work. And that are that those three things are agency, Belonging and competence traditionally, this is labeled a little differently.

If you research self determination theory, but rough and rough ways, this, this certainly covers the base for us. Agency simply means, could we invite employees? to picture a world where they can do something in the future that they can't do right now, where they have, where they're willing to raise their hand and say, I'm going to go try something that's harder than I know how to do that is beyond me right now, but I'm going to be on the hook for it. And could you create an environment where that is actually the thing that's held up with high status and with a sense of esteem. So agency is the first thing, a willingness to raise your hand and do the hard thing. The second thing is. Competence where people just get better at their job every day.

They're, they develop a sense of mastery over time. And then third, and really that there's a chance for that to happen. And the third, that they belong to something that's bigger than themselves. They internally believe in the thing that's happening. And where we see this go sideways a lot with organizations is when there's just kind of a, a cynical attitude where it's just like, Oh this, it, it doesn't feel attached to reality in a meaningful way. But ironically, when you get more objective in your measuring of what you're trying to do and talking about it over and over again, belonging can open up for employees. So agency promote that competency, promote that belonging, promote that These are the long term levers that you can pull. to help with satisfaction at work over the long haul.

[00:25:17] Taylor Holiday: So what Dan's getting to now is the next step, which is translation from the ideology. into operationalizing ideology, which I believe is actually the harder part. It's not hard to write good ideological principles. If you reference, as a good example, Mr. Beast's work manifesto, where they define the standards of expectations.

I think it's a great example of what I'm talking about, of setting ideology and standards, but then you have to actually operationalize them. And so one way, and we're going to go through a few of the examples of how we've done this at CTC, where we defined a set of standards in practice or in ideal, in ideology, and now we pulled them into practice.

And one of them was just around something as simple as a company survey. So in the company survey, we used to, we used to call it the pulse at CTC. And if you go read the distinctions and the questions and the language, they really matter because they frame up how the employees should they themselves be evaluating their own experience.

Right. And so if you ask someone, how did I serve you well, or how are you feeling or how is your experience of X, Y, and Z, or how satisfied are you with X, Y, and Z? That sets a mental frame that like, Oh, I should be evaluating how you've provided service to me. Which again is makes sense. If you are the customer, I think that makes a lot of sense.

But the thing we're doing here is actually an evaluation of how you are delivering the experience. And to ask how competent you feel, how equipped you feel at doing your job well, and then how connected or how much belonging do you feel in the process of contributing to that outcome? And so just the subtlety of how questions are asked to people sets up a way in which you are asking them to evaluate their own experience of the job.

And just by beginning to ask them, Hey, how effective are you at doing the thing that we promised to do? Forces the evaluation is about me and my, my efficacy. That's a big reframe for helping people understand what we're doing here, which is you should provide negative feedback. If you feel like you are not set up to deliver on the promise to the customer.

That's what I want you to tell me about, but your experience of it. I think when you self reflect on it as a, how do I feel in that process begins to set up a different frame. And it's actually funny because what I found is the thing that actually leads to the best feeling is actually. The sense of greatest contribution and competency.

So to Dane's point, when I feel like I'm really good at my job, people are experiencing a benefit. I know how to do it with agency and autonomy, and I'm doing it around other smart people that it turns out that my experience is also better as well. 

And so there's actually like a a by product where one leads to the thing that you initially were trying to do in the beginning, but the questions you ask people will really affect the way that they see themselves inside of the organization.

[00:28:00] Dane Sanders: Yeah, this, this this virtuous cycle that you're describing really does play for the individual. And then it also plays in the group or in the collective. And I think You have to let it, you have to ask those questions like you're describing Taylor, but then also be willing to give space for people to go through a transition period where they're going from one set of answers of like, how, how do I. How do I want to rate my experience in the workplace in contrast with does the workplace help me do what the workplace says is most valuable for the mission at hand. And it turns out that people really like that sense of satisfaction when they're making a difference and they can see it when they see themselves improving, when they see themselves as a group, all buying into the same idea and running in the same direction.

It's highly motivating for the long haul. And. Doesn't necessarily, I mean, we, we care a lot about compensation and making sure people have a clear pathway to improving their careers and so on. In this season, while they're at CTC, it's really critical that they understand they're doing a significant thing right now for the brands and for themselves as we, as a collective group, it's almost like this moment.

I think of You know, professional sports teams that have an interest in not just being a professional athlete where they get paid a lot of money, but actually want to be on teams that win, that actually go somewhere and do something extraordinary. And when we defined what winning was, that it was actually about our customers wellbeing, that really set the table for Things like the collective index, and, but it also could to be fair there, there were some folks, good people that, that weren't up for that.

They didn't want necessarily to be on held to really high standards and expect that they would be lot would be asked of them. They maybe had interests beyond the workplace. That really was their. The thing they wanted more than anything and we needed to make it really easy for those good people.

And we really see them as good people to lead so that these great people could stay. And this became part of our ethos as well. 1 of

[00:30:17] Taylor Holiday: So let's go, let's go, let's go into a few of the other specific things that we've implemented to bring these things to life. So how do we, because I think one of the things that was hard was what does it mean to be a good performer is like, okay, how do we begin to actually evaluate these ideas? And the reality is, is that there's, this is an opportunity for there to be immense bias inserted.

Because into our experience of how we like people's work versus do we actually have clarity and visibility into what it means to be successful in their role? And then how do we sort of combine these both quantitative and qualitative measures to get clearer on the idea of the impact? So maybe we can talk about some of the things that we went from there to execute this calling up and calling out.

[00:31:01] Dane Sanders: Sure. So one of them this is an idea that I borrowed from a, a mentor of mine, a guy named Dan Tini. He calls the Rule of 10, and it's a creative way to really measure impact of an individual. So the, the easiest way to think of it is for listeners is picture any group of 10 people in a, in a group and a random group.

You could picture you know, small group projects in college. You could picture, people in your, your on your team or company right now are in the division and any group of 10 people, usually in a broad stroke kind of principled way, you'll have about two of those 10 that are the dream team members.

They're the ones who are. Always innovative, always driving forward, always interested in making the place better, living out the values without you having to say anything about those values. They, they kind of, their default setting is amazing. And when you find those, those folks, they represent about 20 percent of the population by default. You want that number to increase, but as a starting point, that's the case. Usually there's also another group that are really quiet detractors. They're, they're the ones that are kind of status quo seekers. They always are pressing around like, oh, we really thought this through. This feels a little risky.

This looks like a lot of work. I'm not sure we can do it. We've tried this before the naysayers. And if those are the threes. Of 10 and the twos of 10 are the kind of the performers that you, you want everyone to be, there's this third group. And the third group is the interesting one. That's the group of five. And so, and the five are on the fence. So you have twos that are key employees, you have threes that are detractors, and you have fives that are on the fence. And one of the exercises that we've gone through and go through every single week with our managers is we have a chance to. Ask the managers who on your team are twos, who are your team?

Like that you would say are key. Like we would succeed because of them. And are there any detractors that we would need to be aware of? And then the folks that are in the middle of the on the fence people how do we direct the conversations in such a way that we're enrolling the on the fence people to become key employees?

Because if we don't, we're in a race, we're in a race to edify the key employees, to hold them up and say, these are the standards that we live by and enroll the fives in that direction. Or. Unintentionally, the detractors will enroll the on the fence people and you'll create some dysfunction in your culture. So we ask our managers every single week, how, even though it seems a little subjective, because it is for them to assess who on their team Our key are on the fence and our detractors. And what are we doing about it? So we have various interventions that we can have conversations things that we can create with these employees to reinvent their relationship and to have them lean in the direction. And what we've directed our managers to say is, look, your key employees spent a lot of time with them, hold them up, edify them, do everything you can and do that to enroll the fives, but don't spend a lot of energy trying to convince the detractors. And that might sound counterintuitive, but our interest was to actually create an environment, a culture where it was unpalatable for detractors to want to stick around. This is the idea of making it really easy for good people. Who may be afraid of putting themselves on the hook, afraid of getting better at their job every day, because it might feel like you're failing in the short term, afraid to really believe in an organization and where you're headed, but instead have them decide, do, do you want to be a part of this thing or not?

Because it might not be for you. And when we have. Raised our consciousness to this on a regular cadence, like every week and had these conversations, it opened up real clarity of what, what we do here at CTC, what our standards really functionally mean.

Now we have a lot of other initiatives, but that's one of them.

[00:34:59] Taylor Holiday: Yeah, well, I can't. So we'll go through some more in a second. I can't overstate, though, how important the idea is that there's a race happening where the twos and threes are competing for the fives every day. And I will just tell you detractors are viruses. They they will create and spread detraction.

And again, sometimes and here's the hard part. Sometimes their detraction is warranted, meaning that they were wronged. That they are right about the injustice that was cast upon them. They got a raw end of the deal from something that happened inside of the company. And so therefore their sentiment about the organization is both negative and correct.

This is the category that became very hard for me to deal with, which is to be like, man, I can understand why that person feels about CTC the way that they feel. But here's the thing, it doesn't matter if they are at a place where they can no longer see with an optimistic or positive view about the future of the organization, that it is best for both of you, that you part ways and that you can own, Hey, you know, next, well, we've learned a lot from the setup of this.

We probably weren't set up for success in every case. But I'm sorry, we're going to move forward. I still think that sometimes when people reach that level, there is no coming back. And so it's really important that you move forward. And then other times there's cases where people are just by default cynical, and maybe it has to do with a previous wound they carry from some other experience they've brought with them into your organization.

But regardless, you are in a race and every day this race is occurring and there's More powerful that you can do than to give more voice to the key employees and the people that are bought in and to try to find and root out detraction. And again, this isn't, this isn't suppression of disagreement.

That's not what we're talking about here. Disagreement is not detraction. There are, there are people with whom you can invite healthy disagreement around ideas, but they have to be bought in and sharing the core mission and sentiment that you're after. Those are just different things. And it's important to, to acknowledge that.

[00:37:06] Dane Sanders: That's right. They're constructive. And, and I love what you said Taylor on Assessing over time, what is going on for an individual? Is this a fixed trait for them? Or is this a temporary state? I think the truth is everyone listening in any given week can be a detractor beyond the fence or be a key employee, depending on maybe there's things going on beyond the workplace or just things that are challenging in our lives. And I think it's important to tune into is this just a moment or is this just something that is consistent and persistent? And. And you can't really tell which it is if you're not looking at it regularly and engaging in conversation around it with the individual. And I think that's, that's what we're constantly looking for.

And we're making a judicious assessment as to what our sense is. Is this person going to be a detractor? You know, for the long haul, or can we give them a chance to actually be enrolled in this race that you're describing where the key employees, plus the on the fencers that are moving in that direction, they see that as a better world to be a part of, and they actually want that

[00:38:14] Taylor Holiday: Yeah. and, 

[00:38:15] Dane Sanders: do get this room.

[00:38:16] Taylor Holiday: and to your, to your earlier point though, and I think this is where I would find you to be a fairly optimistic person in your view of humans. I would hold a very high standard for what it sounds like for the potential of a detractor to convert because you do not want to waste organizational energy trying to sway them back to being on the fence.

[00:38:34] Dane Sanders: Yeah.

[00:38:35] Taylor Holiday: Much better to use organizational energy to take someone on the fence and move them into a key employee and support and advocate than it is to try and get a detractor from a three to a four, you know, because even if you make progress, what you're still doing with is. And on the fence employee with a predisposition towards cynicism.

And I just think that like, that's, that's what success would look like. And I would much rather that success in converting somebody look like taking from someone from on the fence to an advocate and that energy is better placed in a lot of cases that like, sometimes you have to just own, Hey, that was a failure in the hiring process.

We didn't root this out. We're going to go back and try again. And that organizational energy is just just better spent. 

So I think you have to be careful there though.

[00:39:16] Dane Sanders: Oh, I, I totally agree. And, and you're right. I might have a bias towards optimism, or at least in the way that I'm talking, it sounds like that. But I think in practice, it's, it's pretty rare. If people show up as detractors pretty consistently, they're probably detractors. And, and to expect that you're going to change them probably is a little bit of an arrogance that you think you can do things that,

that they don't actually want to

participate in.

So I think it's probably wise to Yeah. to be attentive, but there's other ways to be attentive. And I

[00:39:45] Taylor Holiday: yeah, 

Let's go through a few of those. Let's, let's talk through some of the, other operational systematization. So we, so when you describe this, this measurement, to be clear, we have something called the KEI, are you going to talk through that 

Cause I actually, I actually, I actually have to every week, categorize all of my direct report people into one of those spaces that you're describing to actually take constant stock of Where we're at on somebody's where they fit into those categories between wholehearted, ambivalent and disengaged.

[00:40:13] Dane Sanders: Yeah, yeah, and I, I did misspeak a little bit because really, I was speaking with the collective index, which is something we measure on a quarterly basis. But the weekly thing that you're describing Taylor connects to an initiative that we started at the very beginning called the depth chart and this, and this will lead us to the KDI.

So the depth chart was basically this idea again, pulling from sports analogies where on a given team, and this doesn't work for every organization, but if you have roles in an organization where multiple people, Okay. We asked the question, what if we could figure out a way to create a depth chart, similar to, let's say, a football team to know who QB1 and QB2 or running back one and running back two is based off of objective metrics.

So skills and behaviors that we know in that role lead to success consistently. Let's first identify what those things are. And then let's go through a process where we actually rank. Okay. Individuals within a role within a department, within an organization as to where they stand. And at the beginning of this, we're very careful because we had imprecise data.

We wanted to make sure we're looking at it from as many objective metrics as we could, as opposed to just subjective takes. And in essence, we started with this idea of, could we create a depth chart for each role? But then we realized, and we thought that was going to be the whole point. Tool that we were measuring, but then we realized we could go a lot further and we started asking questions. Like, what if we incorporated quarterly goals? What if we incorporated things like Are what we call the drama tax. And this alludes a little to what we were talking about earlier, where the energy output for some individuals, because they're they're threes and they always want to talk about stuff.

That's, that's an expensive use of energy within an organization. And if there was too much of that, we started asking the question, is there a drama tax for paying and the other side of the equation, maybe there's not enough energy. There's a sense in which there's just kind of a. A low level resistance that isn't out in front of everybody, but is pulling the team backwards in a negative way.

And we wanted this kind of Goldilocks method of assessing interpersonal energy and we include that in the key employee index. So picture the key employee index, which started for us as a big spreadsheet. That had quarterly goals and whether or not they were achieving and where they were. Then we had behaviors within a role.

We had depth chart where they ranked relative to others in that role within the department. And then we had other things like, are they a flight risk? Is there a drama tax in the negative? Like meaning they, they don't have enough energy or is there a drama tax in the positive where they have too much sucking energy away from the mission at hand. And you added all that, all that up. And we, where we landed. Was this thing called the key employee index where we could keep a weekly personal pulse with the chance for immediate action. And this, I think, has been for us a significant illumination as to where an individual employee is any given time.

so the data is collected weekly twice a month my department sits down and looks through every employee in the whole organization and ask the question, if they are a flight risk, do we have a backup plan? If they are there any conversations that are being had? Are there agreements that we could be making with those individuals so that they could be conscious that we're conscious of what's going on and invite them to respond to any kind of negative trends. And as we got into that, we started being able to just very efficiently Measure things like where are they in the rule of 10? Are they a key employee or not? What's their status? Are they wholehearted or are they kind of half hearted? Are they trying to be perfect? Are they a flight

risk? Are they is the energy quotient right?

Is there any kind of intervention that we're doing in response? You'll see this VIP thing. We'll talk about that in a moment. Do we have a backup plan? Are there any agreements that need to be made? Do we even know Okay. Their personality And how we want to talk to them. We use this thing called five voices that helps us know how to best approach an individual in such a way that they're most likely to hear any kind of constructive feedback. And then we take kind of specific notes on what's going on for that individual and what their tenure is, how long they've been with us. You add all those things up and we actually can create really helpful dashboards that tell us. What current interventions what's going on. We can drill into any of these columns. And And find out if, let's say we have a flight risk column, we can very quickly go what I can initiate with any manager and saying, what are we doing with this individual right now? So that the manager is even increased in their consciousness to what's going on with their team and keeping a real. Responsible effort to make sure their team is healthy and thriving.

[00:44:45] Taylor Holiday: we develop all these interventions that sort of provide support to the issue. Right. So, a classic thing is. Pips, right? Performance improvement plans. That's like a response that the organization steps into once things have become negative. We actually are big believers in these. We actually think that when there is an issue, there should be an intervention and that there should be a proposed solution and tracking against that.

And we've had people progress out of pips like this classic idea that they are just a mechanism for firing people is not a thing. I believe that's actually very costly for the organization. And so we want a performance improvement plan to actually work. So we believe in that. But we also believe. Mhm. In proactive improvement, which is something that we call V.

1. P. S. Which is a way for employees to proactively improve or progress without having to cause a problem first. Then there are other opportunities around level up coaching and agreement. So maybe, Dan, you can talk to some of these interventions that the data reveals the issues, but then you have to have high To go and reconcile them.

So 

clear ideology, operationalization, tracking, and intervention are all part of a systemic implementation.

[00:45:47] Dane Sanders: Yeah. The VIPs for me is one of my favorites because not only is it a clever acronym, but the idea of it being a voluntary improvement plan where an individual says, again, think of our values. They want to get better at their job every day. And let's say they're doing a job that's pretty consistent in terms of the skills and behaviors that get deployed, but they actually want to develop new skills and engage in new behaviors.

They want to progress in their career. If they are meeting the mark, our standard setters in their role, then they have the privilege of raising their hand and going to their boss and saying, Hey, I actually want to get better in this thing that I'm not very good at right now. I've never been exposed to this. And we create. Facilitated apprenticeships, where we take the subject matter expert in the area that they want to improve on. And we pair them with, with the individual who's raised their hand and said, I'm doing well in my job right now. I'd like to get better in other skill sets. And we had designated a time where the, the subject matter expert, their job is to really make the individual do hard things to, to on their late hours and early mornings and consistently be checking in on, almost like a violin teacher giving assessments of, Hey, you want to learn the violin.

You don't know it here. Go do these drills on your own time and come back to me. Let me know how it's going kind of. Perform and we will and do it in the context of your current work. So you're getting, you're adding more and more value to the customer. And I'm going to give you feedback over the course of, say, 90 days. And you're actually going to expedite your learning because the subject matter expert is giving you assignments on ways to refine those skills to go from. I don't have that skill. To I'm bad at that skill to, I'm getting progressively better at that skill at a disproportionate rate because of that very direct input. This is super exciting because we reinforce this on a lighter level with things like level of coaching where people are like, Hey, I want to get better at some of these things. I'm, I'm not in a place where I can do a VIP yet, but I want to relate with my work in a better way. So we'll do like mindset coaching where they'll meet with me or my colleague, Bryce, who are trained specifically on helping people. Move in the direction of disciplined improvement through agency, through mastery and through belonging and even agreements. Agreements are simply like a recognition that I'm not performing at the level that I would like to perform. I could raise an agreement. Let's say. I go to Taylor and I'm like, Taylor, I want to reinvent my relationship with you or some aspect of my work. And would you help co create that with me? And we actually go through a methodical process where an individual. Can go to another individual and reinvent those relationships or go to a, go to a a supervisor and say, Hey, I'm not performing at the level that I am with my work. Can we, can you help me?

Can you help me see ways that I'm not fulfilling my end of the bargain of the agreement and give me direct input on how we can improve that when individuals raise their hand and say, I want a VIP, I want to level up, or I want to reinvent through an agreement. All of these mechanisms. Signals to us that they are indeed twos, that they want to get better and that they're willing to put in the effort to get there. Or if it goes in the other direction, where a supervisor says, Hey, I think you could be amazing in this new area. Would you like to consider a VIP? Or I think you could benefit from level up coaching or The, the supervisor wants to create the agreement. It works as well, depending on how people respond to it. But in all cases, what we're doing is we're aligning incentives to our mission and our values. And the, even the idea of our ethos of a hundred percent responsibility, putting agency in the hands of the individual to say, I want to get better. And I'm willing to do the hard things to, to become better is, is a, sadly, a rare thing in a lot of environments.

And as we have experimented with this, what we've discovered is that Is a lot of employees, really great employees actually want to get better. And when they see a path to get there, it gives them a tremendous amount of hope

[00:49:51] Taylor Holiday: So all of this, and there's so much more, I would encourage you all to download this deck and see some of the things and the examples, but the end result for us, just as a validation for the premise is that we have watched our turnover rate. all declined substantially during this period combined with the end result being the longest The highest average tenure of an employee that we've ever had at CTC.

So the end result is by creating an environment where the expectation of people actually went up substantially, that the standards were raised. The end result was the client had a better experience, that the quality of work that they were receiving went up. The employees were more satisfied because they felt like they were contributing to meaningful work and they knew if they were here that they had to work at a level that would make them excellent at their job and they feel proud to be excellent.

They're amongst excellent people. And in the event that there's any decline to that, there's a very strict set of actions that the organization takes in order to protect the promise that we're making. And that above all else is the standard that is the principle that governs the organization is we are making a promise to our customers are about the value we're going to deliver, and that is not a thing we can violate, not if we want to thrive.

And so for all of us, that's the end result. So. Thing is a cool result is that Dane is now talking to some of our customers about how they can implement this. He's on Twitter. You can check him out. Dane, what's your handle on Twitter

[00:51:17] Dane Sanders: at Dane Sanders,

[00:51:18] Taylor Holiday: at Dane Sanders? Really complicated. He's also Dane at common thread collective or common thread co.

com. And if this is an experience you're having at your company, or that you're interested in more of these materials, I would encourage you to check him out. And he also has a podcast that he's done a few episodes with Orchid on what's that called? The

[00:51:37] Dane Sanders: business.

[00:51:38] Taylor Holiday: people business. I would encourage you to check those out.

There's more practical insights there about how we're bringing this to life every day. And look, we're not perfect. We're figuring it out. We've got tons of room to keep doing better and better at this task and we're committed to doing it. Yeah. But now the standard is the standards, the standard. And we're ruthlessly committed to continuing to uphold that.

So Dane, thanks for joining this episode. Any parting words here to give the audience?

[00:52:03] Dane Sanders: The only thing I'll say is, there's this moment usually with new hires, these applicants that are coming in our way and they want to ask the question, like, what, what is it about CTC that you like when you have a chance to work here? And

probably my favorite part of the answer is the one that's most true to me is there's something that's remarkably satisfying to work with a group of professionals that actually know Want to be someplace that you don't feel like they're mercenaries. you feel like they're part of something, a really special moment. And having been in the workplace for a long time that's not as common as I wish it was. And I, I think the, the sense of satisfaction that comes. from working with other people that are similarly minded and are interested in doing something really, really special is incredibly gratifying. And my hope is as folks are listening that they, they picture that that's a real possibility that they could create that in their environment. And that the difference it makes is unmistakable. CTC is in a place of we're flourishing right now. Individuals are flourishing. We're not perfect. We had a lot of, to your point earlier, we have a lot of work to do, but I will say that the lag metrics of what we haven't, we haven't lost a key employee since quarter one, 2023 in e commerce, that's a massive deal.

Our, our, our tenure has gone from less than six months average to over three years average in just a year and a half. And all those kinds of data points are telling us we're doing things in the right, but subjectively, I can't overstate if you take this effort on, it is so meaningful to be a, to create and be a part of an organization like this, to know that you're contributing to that level of flourishing, even while ultimately you're really helping your customers do what they couldn't do without you. So I, I think this project can feel. Like a big project for a lot of people, but I really encourage folks to start dipping their toe into this because it makes everything better. All right. Thanks Taylor.